How to Calculate the Reorder Point

Описание: This video shows how to calculate the reorder point for inventory.

The reorder point is the level of inventory that triggers a purchase of additional inventory. The reorder point is calculated by multiplying the average daily usage rate (the average number of units sold each day) by the purchase order leader time (the number of days it takes for inventory to arrive after it has been ordered).

Reorder Point = Average Daily Usage * Lead Time

Thus, if you sell 8 cans of peaches every day and it takes 3 days for cans of peaches to arrive when you order them, you will want to place an order for more peaches when you have just 24 cans of peaches left in your inventory.—
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